Shoprite Holdings (NAM:SRH) ROC % : 11.93% (As of Jun. 2024)

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What is Shoprite Holdings ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Shoprite Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 11.93%.

As of today (2024-12-12), Shoprite Holdings's WACC % is 13.94%. Shoprite Holdings's ROC % is 11.81% (calculated using TTM income statement data). Shoprite Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Shoprite Holdings ROC % Historical Data

The historical data trend for Shoprite Holdings's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Shoprite Holdings ROC % Chart

Shoprite Holdings Annual Data

Trend

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Jun24

ROC %

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8.94

11.35

11.56

10.89

11.44

Shoprite Holdings Semi-Annual Data
	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial															10.64	11.78	11.43	12.10	11.93

Shoprite Holdings ROC % Calculation

Shoprite Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2024 is calculated as:

	ROC % (A: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2023 )	+	Invested Capital (A: Jun. 2024 ))	/ count )
=	11613 * ( 1 - 30.24% )	/	( (68405	+	73192)	/ 2 )
=	8101.2288	/	70798.5
=	11.44 %

where

	Invested Capital		(A: Jun. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	102450	-	23521	-	( 13352	-	max(0, 37441	-	47965	+	13352	))
=	68405

	Invested Capital		(A: Jun. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	112328	-	30615	-	( 13020	-	max(0, 41538	-	50059	+	13020	))
=	73192

Shoprite Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	11636 * ( 1 - 29.59% )	/	( (64147	+	73192)	/ 2 )
=	8192.9076	/	68669.5
=	11.93 %

where

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	107973	-	33793	-	( 11092	-	max(0, 40789	-	50822	+	11092	))
=	64147

	Invested Capital		(Q: Jun. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	112328	-	30615	-	( 13020	-	max(0, 41538	-	50059	+	13020	))
=	73192

Note: The Operating Income data used here is two times the semi-annual (Jun. 2024) data.

Shoprite Holdings (NAM:SRH) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Shoprite Holdings's WACC % is 13.94%. Shoprite Holdings's ROC % is 11.81% (calculated using TTM income statement data). Shoprite Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Shoprite Holdings ROC % Related Terms

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Shoprite Holdings Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Shoprite Holdings Ltd (NAM:SRH) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

SHOPRITE:Zambia SHP:South Africa SRGHY:USA HY7:Germany

Address

Cnr William Dabs Street and Old Paarl Road, Brackenfell, WC, ZAF, 7560

Website

https://www.shopriteholdings.co.za

Shoprite Holdings Ltd is part of The Shoprite Group of Companies, an African food retailer, which operates in countries across Africa and the Indian Ocean Islands. The primary business is food retailing. Besides food retailing, the company is operating in furniture, house products, fast foods, pharmacies, and liquor business segments. The company is targeting consumers at all income levels. The Checkers, Checkers Hyper, and House & Home stores address higher-income groups, while Shoprite Usave focuses on the lower end of the market. Shoprite and OK Furniture offer products for the middle- to lower-income market. The company's reportable segment includes, Supermarkets RSA, Supermarkets Non-RSA, Furniture and Other operating segment.

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